METALS-Most metals rebound from fund selling as trade talks progress

SINGAPORE, May 2 (Reuters) - Most base metals except copper and zinc on Thursday rose from a tumbling session in the previous day, with progress in the U.S.-China trade talks lending some support.

The United States and China are nearing a trade deal that would roll back a portion of the $250 billion in U.S. tariffs on Chinese goods, Politico reported on Wednesday.

U.S. Treasury Secretary Steven Mnuchin said on his Twitter account that the two countries have completed “productive” talks in Beijing.

Base metals slumped on the London Metal Exchange (LME) on Wednesday, with aluminium and lead hitting their lowest in more than two years, as computer-driven funds sold after an options expiry amid concerns about China demand.

FUNDAMENTALS

* Three-month copper on the London Metal Exchange edged down 0.2 percent to $6225 a tonne, while zinc fell 1.1 percent after Wednesday data showed zinc stocks in LME-approved warehouse rose to 85,050 tonnes, its highest since Feb. 19. MZNSTX-TOTAL

* The U.S. Federal Reserve on Wednesday held interest rates steady and signalled little appetite to adjust them any time soon, taking heart in continued job gains and economic growth and the likelihood that weak inflation will edge higher.

* Copper prices are expected to extend their rebound in coming months as recovering demand in top metals consumer China and mine disruptions create a larger-than-expected deficit, a Reuters poll showed.

* India’s Hindustan Zinc Ltd (HZL), the world’s second largest zinc miner, expects its output to grow in 2019/20 after a drop in the previous financial year, a senior executive said, putting pressure on global prices.

* U.S. manufacturing activity slowed to a 2-1/2-year low in April amid a sharp drop in new orders while construction spending unexpectedly fell in March, suggesting economic growth was moderating after surging in the first quarter. [nL1N22C1JP

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MARKETS NEWS

* Asian markets traded sideways as two major centres - Japan and China - shut for holidays, while the dollar held on to overnight gains after the U.S. central bank poured cold water on rate cut expectations.